Australia’s best income protection insurance policies for 2024
Life is full of unexpected moments. So, if you have family or other loved ones who depend on you financially, what would happen if you suddenly couldn’t provide for them anymore?
One way to help keep those worries at bay is to look into an income protection insurance policy.
Income protection policies could help cover a portion of your income if you’re unable to work due to illness or injury, meaning you won't be completely out of pocket.
With so many options out there, choosing an income protection insurance policy can be a daunting prospect. A great way to start your search is with the best insurance policies as per the 2024 Mozo Experts Choice Life Insurance Awards^.
Our panel of expert judges analysed pricing and coverage information from 15 insurance companies to find Australia's Best Value and Best Quality income protection insurance. We’ve listed the winners below, along with a quick overview of one of the most decorated options.
Income Protection Insurance Award Winners
When choosing the 2024 Mozo Expert Choice Award^ winners, our judges considered the quality and value of the covers offered. When analysing a policy based on quality, judges look for standout features, such as the ability to pause cover and premiums, the inclusion of rehab expense cover, total permanent disability benefit, or spouse benefits.
This year’s sole winner for Exceptional Quality Income Protection was:
- TAL - Accelerated Protection
To determine the policies' value, our judges collected quotes for income protection policies with one—and three-month waiting periods and one—and two-year benefit periods.
Policies that made the cut also had to provide partial disability cover, as well as benefits for mental health conditions.
When considering policies offering Exceptional Value Income Protection, the winners were:
- Budget Direct - Income Protection Cover
- NobleOak - Income Protection Cover
- HCF - Income Protect Insurance
It’s worth noting that NobleOak has won awards in almost every category and snagged the prestigious title of Life Insurance Company of the Year – for the sixth year in a row, might we add? You can check out some of NobleOak's key policy features and inclusions below.
NobleOak Premium Life Direct Income Protection Insurance*
- Mozo’s Life Insurance Company of the Year for 2024
- Insure for up to 70% of your pre-tax income (up to $30,000 a month)
- Premium waived in the event of total or partial disability
Not only did NobleOak win the title of Life Insurance Company of the Year for the sixth year running, but it won awards in six out of seven categories in the 2024 Mozo Expert Choice Life Insurance Awards^. Its income protection insurance was recognised in the Exceptional Quality Life Insurance category too! Not an easy feat!
When you sign up with NobleOak, eligible customers can insure up to 70% of their pre-tax income (up to $30,000 a month) in case they suddenly become unable to work due to an illness or accident. You might also be entitled to smaller benefits if you’re partially disabled and return to work in a reduced capacity. NobleOak also offers premium pause, where you can pause your premiums for up to 12 months if you take an extended leave from work (i.e., full-time study or paternity leave). Keep in mind, though, that the premium pause will only be available once your Protection Insurance cover has been in place for at least 2 years.
Make sure to read over the PDS on NobleOak’s website carefully before signing up.
2024 Mozo Experts Choice Award^ wins: Exceptional Value Life Insurance, Exceptional Value Life & TPD Insurance, Exceptional Value Life & Trauma Insurance, Exceptional Value Income Protection, Exceptional Quality Life Insurance and Life Insurance Company Of The Year.
* Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.
For more information about our Mozo Experts Choice Life Insurance Awards, as well as the full list of winners across the categories assessed, be sure to check out our 2024 methodology report.
How does income protection insurance work?
Generally, if you’re forced to take time off from work – because of injury or illness – then you could receive a percentage of your regular income from your income protection insurance provider. That way you can still pay for your everyday expenses like rent, mortgage payments, groceries, and other fees.
You could see benefit amounts (pay-outs) of up to 90% of your pre-tax income for the first 6 months, followed by up to 70% for the remainder of your benefit period, depending on your provider.
You’ll usually receive payments for a specified period of time, with the amount of the payments based on your income for the previous 12 to 24 months.
What does income protection NOT cover?
Income protection insurance doesn’t cover you if your employment is terminated or if you’re made redundant.
Are income protection insurance premiums tax deductible?
Income protection insurance premiums are tax deductible – but only the premium itself. Remember that any payment you receive during the benefit period from your insurance provider has to be included on your tax return for that financial year.
The only cases where you won’t be able to claim your income protection insurance premiums are when your insurance is provided through your superannuation fund (and the premiums are deducted from your super contributions), or if you’re already being paid insurance benefits from that policy at the time.
How do I make an income protection insurance claim?
Making a claim for income protection insurance is much like making a claim for most other types of insurance.
First, you’ll want to contact both your insurance provider and your employer as soon as possible to keep them informed.
Next, your insurance provider will supply you with a claim form and request a few documents from you as evidence. These docs will include a report from your GP, your tax file number information, a report from your employer, evidence of your pay history for the past 12-24 months, and your ID.
After all your information has been submitted, you’ll need to wait to hear back from your insurance provider for the outcome of your claim. If successful, you’ll have to wait out the specified ‘waiting period’ on your policy before you see any of your income protection insurance payments come through.
Does income protection cover mental health?
Generally speaking, mental illnesses are covered by many income protection insurance policies. Mental health is often treated the same as your physical health, meaning that the same procedures to confirm your condition are necessary in the assessment of your claim.
However, it’s important to know that if you have a pre-existing condition (whether a physical or mental illness) you have to tell your income protection provider when applying for the policy. This may cause your premium to increase, but it may be better than receiving no cover at all for something you did not disclose.
Income protection insurance providers may also recognise that mental health conditions can come about as a result of physical injuries which stop you from work and disrupt your usual life.
To check if you’re covered for mental health conditions, make sure you look through the product disclosure statement (PDS) for your policy, or contact your provider today.
What occupations are covered under income protection insurance?
Most occupations can be covered by income protection insurance. However it's important to keep in mind that if you work in a high-risk job, it may raise the cost of your premium, or affect your eligibility for this sort of financial product altogether.
How does a change in income affect income protection insurance?
When it comes to income protection insurance, most providers will let you make changes to your policy.
There is often a degree of flexibility that allows you to update your amount of cover according to a pay increase or decrease.
However, you'll have to seek approval from your income protection insurance provider and give them information regarding your employment (e.g. occupation, employment status, how many hours you work), your new income, and your health status.
Does income protection insurance cover pregnancy or maternity leave?
In a lot of cases, income protection insurance will not cover pregnancy. However, some (not all) do provide coverage due to complications with pregnancy or childbirth, including post-natal depression. Always make sure to read the product's PDS to ensure you know what is covered and what is not covered when it comes to pregnancy.
The same goes for maternity leave. Income protection won't cover your pregnancy leave in almost all cases.
Fortunately, there are government payments, such as the Parental Leave Pay scheme, available to new parents to help cover the shortfall in maternity leave payments from your job.